According to multiple sources, it seems as if the PS3 has been 'hacked' with a new commercial USB Device called the 'PS Jailbreak'. This seems like the modern day 'HD Loader' and will allow owners to dump all original PS3 games onto a FAT32 hard drive and play the game entirely from there. There is an official website for the product, a retailer has released a couple of videos of it, plus a number of 'hackers' have confirmed it is the real deal. Although there is still the chance that it doesn't perform as expected, so keep an open mind. This is surely a major blow to Sony as the device is apparently plug n' play and works on the latest firmware. *Update* - More details revealed including claims that it will run games 2x faster than Blu-ray, support homebrew and will be fully updateable - a second video has just been released too. All the details inside!

So here's what we know:

Other Hacker talk

Hacker Xorloser has indicated that it is a device that turns the PS3 into a debug unit essentially. This is why it allows people to install and play games from the hard drive.

The likes of Mathieulh have been talking about this and indicate that perhaps it uses illegal code from the PS3 SDK, hence why it works.

The product description and FAQ from various websites:

Q: What firmware version does PS JailBreak it work on?
A. It apparently works on a couple of old firmware verisons, but it was designed for the latest firmware version 3.41

Q. Does PS JailBreak allow every game to work?
A. Apparently 150 games have been tested, and they all work. If a game happens to have 1 file over 4gb the program will not be able to rip the game onto the harddrive. Apparently the worl around is to dump it on an internal hardrive

Q. Can I still play online with PS Jailbreak?
A. When today (19.08.2010) you can, we can't guarantee you will never be banned for using the 3rd party device.

Q. Can Sonly block this with firmware updates?
A. Probably. The have have the USb dongle firmware upgradable, but you can never predict the future. This is made to work with 3.41. If you happen to download an install an update which is higher then this then it is your doing. We will not accept stock back as "faulty" if you have upgraded your firmware.